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High electricity prices are driving Australia’s aluminium industry out of business

High electricity prices are driving Australia’s aluminium industry out of business

Record high power prices are making difficult times worse for the aluminium industry in Australia. The latest victim is the Boyne Island smelter majority owned by Pacific Aluminium (a wholly owned subsidiary of Rio Tinto, and co-owned by several Japanese companies), who decided to reduce production by 14% or some 80,000 tonnes/year at the end of March. Worse, by the end of the month, the Hazelwood 1760 MWh coal fired power plant will also be closed,. Some 100 smelter workers will lose jobs, or approximately 10% of the workforce. Since electricity costs have doubled since October 2016, the Boyne Island smelter was unable to secure the missing 140MW at reasonable prices. 85% of the smelter’s electricity comes from the Gladstone Power Station, a 810MW plant that is 42% owned by Boyne Island under a contract due to last until 2029. However, the remaining 15% is purchased on the open market.